Drupal 7: Entity and bundle select fields with AJAX dependent dropdown

gistfile1.php

<?php

function entity_bundle_ajax_form() {
  $form['entity_type'] = array(
    '#type' => 'select',
    '#title' => t('Entity type'),
    '#options' => array('' => t('- Select one - ')),
    '#default_value' => '',
    '#ajax' => array(
      'callback' => 'entity_bundle_ajax_form_callback',
      'wrapper' => 'bundle-select',
      //'method' defaults to replaceWith, but valid values also include
      // append, prepend, before and after.
      // 'method' => 'replaceWith',
      // 'effect' defaults to none. Other valid values are 'fade' and 'slide'.
      // See ajax_example_autotextfields for an example of 'fade'.
      //'effect' => 'slide',
      // 'speed' defaults to 'slow'. You can also use 'fast'
      // or a number of milliseconds for the animation to last.
      // 'speed' => 'slow',
      // Don't show any throbber...
      'progress' => array('type' => 'none'),
    ),
    '#required' => TRUE,
  );
  $form['bundle'] = array(
    '#type' => 'select',
    '#title' => t('Bundle'),
    '#options' => array(),
    //'#default_value' => '',
    '#prefix' => '<div id="bundle-select">',
    '#suffix' => '</div>',
    '#bundles' => array(),
    '#required' => TRUE,
    '#states' => array(
      'invisible' => array(
        ':input[name=entity_type]' => array('value' => ''),
      ),
    ),
  );

  foreach (entity_get_info() as $entity_type => $entity_info) {
    $form['entity_type']['#options'][$entity_type] = $entity_info['label'];
    foreach ($entity_info['bundles'] as $bundle_key => $bundle_info) {
      $form['bundle']['#bundles'][$entity_type][$bundle_key] = $bundle_info['label'];
    }
  }
}

function entity_bundle_ajax_form_callback($form, $form_state) {
  $entity_type = $form_state['values']['entity_type'];
  $form['bundle']['#options'] = $form['bundle']['#bundles'][$entity_type];
  if (count($form['bundle']['#options']) === 1) {
    $form['bundle']['#default_value'] = key($form['bundle']['#bundles'][$entity_type]);
  }
  else {
  }
  return $form['bundle'];
}

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Related snippet: http://dropbucket.org/node/6973